Lecture 1: The Global Context of Pharmaceutical Products and

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Session 1:Pharmaceutical Products and

Under-served Populations

Alan Lyles, Johns Hopkins School of Public Health

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Overview of Course Sessions (1)

1. The global context of pharmaceutical products and underserved populations

2. International Policy and Legal framework3. Drug manufacture, industrial pharmacy considerations,

quality assurance and regulation4. The Drug Management Cycle: Selection5. Forecasting and Quantification6. The Drug Management Cycle: Procurement7. Drug Donations8. The Drug Management Cycle: Distribution

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Overview of Course Sessions (2)

9. The Drug Management Cycle: Use10. Budgeting and Cost Control11. Management Support Systems: Planning Cycle12. Access to Essential Drugs13. Pharmaceutical Care and Drug Utilization in an

HIV/AIDS Clinic14. Financing and Sustainability15. Laboratory Exercise on Planning with an Emphasis on

Budgets and Sensitivity Analysis16. Student Presentations

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“The right context is worth 50 IQ points.”-Alan Kay, Inventor of Object Oriented Programming &

Laptop Computer Visionary

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World Drug Purchases: Retail PharmaciesIMS Health –Retail Drug Monitor: 12 Months to Sept 2005*

Sept 2005 Sept 2004 % Growth US$ % Growth Constant Exchange

Selected World 365,348 341,483 7% 5%

North America 192,649 182,200 6% 5%

• USA 180,994 172,182 5% 5%

• Canada 11,656 10,017 16% 7%

Europe 90,685 84,132 8% 3%

• Germany 27,055 24,281 11% 7%

• France 22,639 20,641 10% 5%

• Italy 14,619 14,249 3% (2%)

• UK 15,408 15,083 2% (1%)

• Spain 10,965 9,879 11% 6%

Source: IMS Health, Retail Drug Monitor Sept 2005 in US$ millions. www.imshealth.com/vgn/images/portal/cit_40000873/53/63/76322469IMS%20Retail%20Drug%20Monitor%20September2005.pdf

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World Drug Purchases: Retail Pharmacies

IMS Health –Retail Drug Monitor: 12 Months to Sept 2005*

Sept 2005 Sept 2004 % Growth US$ % Growth Constant Exchange

Selected World 365,348 341,483 7% 5%

Japan* 60,820 57,122 6% 5%

Latin America†15,524 13,935 20% 19%

• Mexico 7,184 6,338 13% 11%

• Brazil 6,369 4,844 31% 31%

• Argentina 1,971 1,752 13% 13%

Australia/NZ 5,670 5,094 11% 5%

*Including hospitals; †Leading three.

Source: IMS Health, Retail Drug Monitor Sept 2005 in US$ millions. www.imshealth.com/vgn/images/portal/cit_40000873/53/63/76322469IMS%20Retail%20Drug%20Monitor%20September2005.pdf

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Percent of All US Firms Offering Health Benefits:1996-2005

Adapted from Employer Health Benefits Survey 2005. Kaiser Family Foundation. http://www.kff.org/insurance/7315/sections/upload/7375.pdf.

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OP Prescription Drugs as Percentage of US National Health Expenditures: 1993 v 2003

Adapted from: Smith C, et al. Health Spending Growth Slows in 2003. Health Affairs 2005;24(1):185-194. Exhibit 5.

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Relative Contributions to Rising US Rx Expenditures: 1993-1997 vs 1997-2002

1993-1997 1997-2002

Price 19% 25%

Rx Type 34% 34%

Utilization 47% 42%

Adapted from: Kaiser Family Foundation. Trends and Indicators, 2004 Update, Exhibit 1.17.

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Access Barriers: Drugs Are Costly

• Major out-of-pocket expense• Can represent as much as 20 percent of total national

health expenditures, 60 percent of total recurrent health expenditures

• Drug expenditures are often second only to personnel salaries and benefits

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Many Health Interventions Depend on Pharmaceuticals: Prevention & ACSCs

• Expanded Program on Immunization• Integrated Management of Childhood Illness• Directly Observed Treatment, Short-course• Roll Back Malaria• HIV prevention (social marketing of condoms)• AIDS treatment and care

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Coverage Distribution

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US Non-compliance from Out-of-Pocket Costs*

Out-Of-Pocket Health Status

Due to cost:Base:

All Adults

Have Condition

for Rx

$0-$100

$101-$250

$251-500

>$500

Excellent to Very Good

Fair to Poor

Did not ask MD for an Rx 18% 23% 14% 37% 42% 42% 12% 33%

Did not fill an Rx 22% 30% 19% 50% 48% 44% 13% 41%

Used a lower dose to extend Rx

15% 21% 10% 35% 36% 41% 8% 29%

Used less than Rx’d 18% 25% 13% 45% 42% 46% 11% 37%

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*Adapted from: Harris Interactive. Higher Out-of-Pocket Costs Cause Massive Non-Compliance in the Use of Prescription Drugs, and This Is Likely to Grow. Health Care News. 2002;2(22):2. http://www.harrisinteractive.com/

US Rx Compliance: Disease Specific Behaviors in the Past 12 Months

Multiple Sclerosis Hypertension Depression

Not filled 15% 17% 30%

Delayed filling 24% 26% 41%

Taken in lower doses than prescribed 23% 14% 25%

Taken less often than prescribed 30% 29% 43%

Discontinued sooner than prescribed 15% 15% 30%

Adapted from: http://www.bcg.com/publications/files/TheHiddenEpidemic_Rpt_HCDec03.pdf

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US Rx Compliance Behaviors & Gender:How does female compliance affect household behaviors?

Women Men

Not filled 21% 15%

Delayed filling 30% 20%

Taken in lower doses than prescribed 15% 12%

Taken less often than prescribed 33% 26%

Discontinued sooner than prescribed 23% 18%

Adapted from: http://www.bcg.com/publications/files/TheHiddenEpidemic_Rpt_HCDec03.pdf

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Drug coverage among Medicare beneficiaries with CHD/MI increases use

of lifesaving drugs*

• Medicare beneficiaries with coronary heart disease– Statins recommended to lower cholesterol– Statins are costly

• 27.4 % with coverage used statins• 4.1% without coverage used statins

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What Is Known about Drug Management?

• Effective ambulatory Rx use can reduce morbidity and mortality

• Wise drug selection underlies all other improvements• Effective management saves money and improves

performance• Rational drug use requires more than drug information• Systematic assessment and monitoring are essential

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Increased Efficiencies: Pooled Procurement

19Source: MSH: Management Sciences for Health. Used with permission.

Pharmaceutical Expenditures

Region Per Capita ($US/yr) As % of GDP

Private Expenditures as % of Total

Africa $8 0.86% 68%

Asia $12 0.59% 76%

LA/C $31 0.87% 75%

Developed Economies $137 0.65% 33%

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Understanding Medication Use


Geographic Accessibility: Tanzania

PublicDistance to Health Facility

14% >10 km to public facility

6% >10 km to private drug retailer

Private Clinics

Private Pharmacy

Duka La Dawa

NGO

Source: MSH: Management Sciences for Health. Used with permission.

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Affordability: Cambodia, El Salvador, Ghana, India

*Child 1-5 years old, co-trimoxazole; **Adult, amoxicillin


Pharmaceutical Management, Access, and Use of Medicines


Pharmaceutical Management Cycle

Policy and Legal Framework


Dimensions of Access & Potential Barriers

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Essential Medicines Definition

Essential medicines are:– those that satisfy the priority health care needs of the

population– selected with due regard to public health relevance,

evidence on efficacy and safety, and comparative cost-effectiveness

– intended to be available within the context of functioning health systems at all times in adequate amounts, in the appropriate dosage forms, with assured quality and adequate information, and at a cost that individuals and the community can afford

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Substandard Essential Medicines in Developing Countries


Percentage of Medicines Prescribed from Essential Medicines List, by Sector


Understanding and Improving Access to Essential Medicines

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Increased Efficiencies: STGs

Total Annual drug costs in a Latin American country for treatments during a cholera epidemic, costs in millions of US$ (1991)


Challenges for Improved Public Drug Supply

• Health reform, equity, and financial sustainability• Efficiency• Rational use• Changing roles of public and private sectors

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Essential Medicines Availability & Dispensing in Dispensaries


Number of Medicines on National Essential Medicines Lists


Goals of a National Drug PolicyHealth-Related• Available essential drugs• Improve attendance at health facilities• Safe, affordable, and effective drugs• Rational useProper selection of drugs• Efficient supply

Economic• Lower cost of drugs• Reduce foreign exchange• Provide jobs• Improve efficiency and cost-effectiveness

Development• Human resource development• Improve infrastructure• National production of drugs

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Components of a National Drug Policy

• Legislative Framework• Choice of Drugs• Supply• Rational Use of Drugs• Economic Strategies for Drugs• Human Resources Development• Monitoring and Evaluation• Research• Technical Cooperation Among Countries

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Lecture 1: The Global Context of Pharmaceutical Products and

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